Bitcoin crash shows Asia's enormous influence on cryptocurrencies

Too often over the past couple of years, whenever the price of bitcoin sank, even by 5%, mainstream media would rush to call it a “crash.” Given the volatility of bitcoin, the price would frequently regain its losses within a day or two, making the alarmist headlines look silly.

Those moves were enough to make Japan the new No. 1 bitcoin market by trading volume on exchanges (three of the top five global exchanges are in Japan), and the Japanese yen the No. 1 currency used to buy bitcoin (by a healthy margin over USD). Take a look at the below charts for a visual.

In other words: China’s government already killed Chinese bitcoin exchanges, but now it wants to stop Chinese consumers from buying on foreign exchanges, too.

South Korea: mixed signals

Last week, a South Korean official said that the country is preparing a bill to ban bitcoin trading. The major coins plummeted.

“There are great concerns regarding virtual currencies and the justice ministry is basically preparing a bill to ban cryptocurrency trading through exchanges,” Justice Minister Park Sang-ki said at a press conference, according to Reuters.

Add that lack of clarity to the news out of China, and you have a mountain of anxiety still driving the entire coin market down further.

Remember also that the price of bitcoin or other cryptocurrencies is all about sentiment. Bad news leads to bad headlines, which foments negative sentiment. But the true bitcoin believers are all likely holding their coins, and there’s nothing to stop sentiment from turning around in the next few days, and that would buoy prices.

So: Where’s the bottom?

—

Daniel Roberts covers bitcoin and blockchain at Yahoo Finance. Follow him on Twitter at @readDanwrite.